Berlusconi lost power in November 2011. Since then, he supported the
new government of technocrats, probably with the hope that the courts would
leave him alone because of his “collaboration” with the new regime. But on
October 26, 2012, Berlusconi was sentenced in first instance to four years
in prison for tax evasion. Since then, Berlusconi has been running amok.

When Silvio Berlusconi announced his political return, his party, PdL,
revoked its support for Monti's government. Lacking a majority in parliament, the
current prime minister saw no other choice than to announce his departure,
which would take effect after the passing of the budget for the year 2013.
Berlusconi announced that he and his party would support the new budget,
which should be adopted before Christmas.

In this new political climate, speculations arose that Prime Minister Mario
Monti could present himself in the upcoming elections, together with Ferrari
boss Luca de Montezemolo and center-right politicians such as Gianfranco
Fini and Pierferdinando Casini.

Mario Monti himself had announced several times that he would step down
after the end of his mandate as the head of the government of technocrats.
However, he stressed that he would be available if the country would need
him. This implied of course that he would not run for office. Only if the
parties would be unable to form a new government, he would step in again.

The leader of Italy's strongest party (currently polling above 30%), Pierluigi Bersani of the center-left Democratic Party (PD) already told
Monti to stay out of the race (“Meglio che Monti resti fuori dalla
contesa.”). He did not mean for Monti to stay out of politics, although
he had said earlier that if Monti wants to be part of the political
landscape, he has to present himself in the election. Bersani made clear
that he was not ready for a “Monti-bis”, another cabinet of technocrats led
by the former European commissioner.

Bersani added: “Monti could still be useful for the country
in the future, that's why he should better stay out of the race.” The PD
leader made clear that his party would not only continue in the footsteps
of Monti, but that his first step after an electoral win would be to ask the
current prime minister how he could best serve Italy.

A new political force led by Mario Monti and joined by Montezemolo, Fini,
Casini and others would be a game changer. Pierluigi Bersani fears of course
to lose his status as potential next prime minister. However, Silvio
Berlusconi and his party would have far more to fear from such a new
coalition or party since Monti could dwarf Berlusconi on the center-right.

So far, only some 10% of Monti's 400 adopted reform steps have been
implemented. Furthermore, the crucial, structural reforms still have
not been adopted. The labor reform of April 2012 was rather laughable and has
had no effect on the labor market. The overall unemployment rate reached
11.1% in October, with the youth unemployment rate reaching 36%!

If Prime Minister Monti steps town before Christmas, parliamentary elections
could take place as early as in January or February 2013. The
Democratic Party leader Bersani is already behaving as
if he would become the next prime minister. The road to that office is still
far. On the left, Monti will not only have to deal with former communists,
but above all with left-wing populist and comedian Beppe Grillo whose
Five-Star-Movement became the strongest party in the Sicilian regional
election of October 2012.

The Sicilian regional election also highlighted the weakness of Berlusconi's
PdL, which is credited with only 14% to 16% nationwide polls. Angelino
Alfano, the party boss, could not even win in his home province Sicily.

Bersani himself is thinking of an alliance with the Italy's moderate
forces, including Montezemolo and Casini. almost everyone is counting out
Berlusconi as a future possible ally. The famous bunga-bunga champion - who
risks a condemnation for sex with an underage prostitute in early 2013 - will
even have difficulties working together with his former ally, the the
right-wing populists of Lega Nord, a party which has been diminished by of
scandals and, therefore, lost its historic leader
Umberto Bossi (German article).

Silvio Berlusconi opened the door to Matteo Renzi, the young mayor of
Florence, who has just lost the PD primary to Pierlugi Bersani, in which
astonishing three million voters had participated. Matteo Renzi said today
that he had already told Berlusconi twice in person that you can buy things,
but not people. If Berlusconi had left a door open for him, he could only
give Berlusconi one advice, to close it!

Pierluigi Bersani is a former Communist from the Emilia-Romagna region, who has become a relatively moderate
force within the left. Bersani has been a reform minister within the
governments Prodi, d'Alema and Amato. Bersani had been minister of industry
in both Prodi governments as well as minister of transport subsequently.
Would he really be the best next prime minister? Doubts remain. Bersani has
already allied himself with Nichi Vendola and his left-wing SEL party, which
is polling around 5%. How could he enforce a desperately needed labor reform
with such allies?

In a WSJ interview, Bersani rightly said that “fiscal pressure [in
Italy] has already reached unsustainable levels”. Therefore, as prime
minister, he would put the accent on tax evasion, one of Italy's national
sports. There is some hope left even for a Democratic Party-led government.

The center-right needs to unite and to come forward with a credible leader.
Berlusconi has to be kept out of Italian politics. [Added on December 11,
2012 according to news sources, Monti was said to be in talks with Luca de
Montezemolo and Pierluigi Casini to form a new government. In fact, he was attending the
Nobel Peace Prize ceremony in Oslo where he said that he had not yet thought about the
upcoming parliamentary elections in February or March. Implicitly, Monti was not ruling
out anything for the future, but he is not a candidate (yet) and it remains
unlikely that he will present himself as a candidate].

Italy has still ten years of serious reforms ahead of it to bring down the
country's public debt of over 120% of GDP to the levels suggested by the
Maastricht treaty (60%). Forza Italia!